Reaction to the FCA’s new targeted support proposals announced today has been positive, particularly in relation to the effect it will have on people's attitude to pensions.

The new service will allow firms to make specific suggestions to consumers – so they can make better informed decisions about what to do with their money.

The FCA said targeted support “is a flexible and future-proof framework underpinned by the Consumer Duty. It will enable firms to innovate and better support their customers.”

Jon Greer, head of retirement policy at Quilter, said the proposals will make pensions clearer and safer for everyday savers, but he warned they come with trade-offs.

He said the plan to modernise online planning tools should help people see, in plain language, how paying in more, retiring a little later, or choosing a different way to take income could change life after work.

Mr Greer said: “That is positive, but it only works if providers keep assumptions realistic, show figures in today’s money, and make it clear that projections are estimates rather than promises.”

Cath Sermon, head of public engagement and campaigns at Standard Life’s Centre for the Future of Retirement, said the introduction of targeted support “is a positive step which will help ensure that savers don’t feel overwhelmed when making decisions around their pensions.”

She said it is “especially important as we found that even people with a good grasp of other financial areas in their lives, such as mortgages, often feel confused about pensions.”

David Brooks, head of policy at consultancy Broadstone, said targeted support has the potential to close one of the most persistent gaps in the UK pensions and investment system which currently sees millions of people making long-term financial decisions with little to no guidance or financial advice.

He said: “Empowering firms to give consumers clearer, more tailored nudges is a sensible and pragmatic step that should deliver better outcomes for more savers and investors.”

James Floyd, managing director at pensions provider Alltrust Services, said the implementation of targeted support is “one of the most significant regulatory developments in UK financial services in recent years. It has the potential to transform how millions of consumers receive help with pensions and investments, while creating major opportunities for forward-thinking providers.”

Chris Cummings, chief executive of the Investment Association, said: “We welcome the introduction of targeted support, which has the potential to help individuals strengthen their financial resilience and pursue their long-term financial goals.”

Keith Phillips, chief executive of The Platforms Association, said targeted support will allow platforms “to deliver the right information, at the right time, to support customers to make the right investment decision.”

He said the previous system was “far too prescriptive, with disclosure templates that people really struggled to engage with.”

He said it is essential to improve financial education to give new investors confidence to take that first step toward making their money work for them.

Chet Velani, managing director, technology provider EV, said targeted support has the potential to be a game changer. “Key to its success will be the Privacy and Electronic Communications Regulations (PECR) rules and complaints. However, it will fail unless it is embraced as a catalyst for change.”